Managing tax obligations is an essential part of entrepreneurship. Between VAT, profit tax and social security contributions, it is essential to fully understand the procedures to follow in order to remain in compliance with the tax authorities and avoid any sanctions. This article guides you through the main tax obligations of an entrepreneur in France and the best practices to optimize his management.
1. Understand applicable taxes and duties
Corporate tax (IS) or income tax (IR): what is the taxation for your business?
The tax regime depends on the legal status of the company:
- Income tax (IR) : concerns sole proprietorships, micro-entrepreneurs and certain partnerships (EURL, SNC, etc.). In this case, the profits are directly taxed in the hands of the entrepreneur.
- Corporate tax (IS) : applies to companies such as SAS, SARL and SA. The company pays tax on its profits before distributing any dividends to the partners.
The tax rate varies:
- IF: 15% up to €42,500 in profits (under conditions) and 25% beyond.
- AIR: Progressive income tax schedule according to income groups.
VAT: an obligation according to your turnover
Value Added Tax (VAT) is an indirect tax collected on sales of goods and services. Its application depends on the company's tax regime:
- Franchise based on VAT : Exemption for companies whose turnover is less than €36,800 (services) or €91,900 (sale of goods). The company does not charge VAT but cannot recover it on its purchases.
- Simplified real regime : For businesses making up to 254,000€ (services) or 840,000€ (sales). Half-year declarations and payments.
- Real normal regime : Monthly or quarterly declarations and payments for businesses above the simplified regime thresholds.
VAT rates in France:
- 20% : Standard rate applicable to the majority of goods and services.
- 10% : Intermediate rate (hotels, restaurants, transport...).
- 5.5% : Reduced rate (basic food products, books...).
- 2.1% : Super-reduced rate (reimbursed drugs, press...).
Social security contributions: an unavoidable burden
Every entrepreneur must pay social security contributions to finance social protection. Obligations vary according to status:
- Micro-entrepreneur : Contributions calculated as a percentage of turnover (12.3% for sales, 21.2% for services and liberal professions).
- Self-employed person (TNS) (manager of EI, EURL, majority SARL): Contributions paid to Urssaf and Cipav or SSI, representing approximately 40% net income.
- Employee equivalent manager (president of SAS, minority manager of SARL): Higher employee and employer contributions but with better social protection.
2. Respect tax declarations and deadlines
A company must meet several tax deadlines throughout the year:
- Statement of results :
- BIC/BNC (IR): Annual statement as part of the personal tax return.
- IS: Profit tax return (form 2065) within three months after the end of the fiscal year.
- VAT : Monthly, quarterly or annual declarations depending on the regime chosen.
- Social contributions : Monthly or quarterly payments to Urssaf for the self-employed, via the DSN (Nominative Social Declaration) for assimilated employees.
Failure to meet deadlines may result in financial penalties and surcharges.
3. Optimize tax management and avoid mistakes
Anticipate payments to avoid cash flow difficulties
Taxation can represent a significant burden for an entrepreneur. It is recommended to:
- Set aside a percentage of revenue to cover fiscal and social security charges.
- Plan timelines to smooth payments and avoid unpleasant surprises.
Take advantage of tax relief schemes
Some aids make it possible to reduce the fiscal impact:
- JEI Exemption (Young Innovative Company) : Tax reduction and exemption from social security contributions for companies investing in R&D.
- Innovation tax credit (CII) and research tax credit (CIR) : For companies that spend on innovation and research.
- Regional and local aid : Exemptions from CFE (Corporate Property Tax) and other devices depending on location.
Surround yourself with an expert to secure your tax management
Call on a Chartered Accountant allows:
- Of check the conformity of declarations and to avoid mistakes that could lead to tax adjustments.
- OFOptimize taxation by choosing the right tax regime and by applying exemption schemes.
- Of Save time and to focus on the development of its business.
Respecting your tax obligations is essential to ensure the sustainability of your business and avoid sanctions. By anticipating deadlines, optimizing management and surrounding himself with the right professionals, an entrepreneur can better control his taxation and secure his cash flow.
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